Top TEN #7 – the tyranny of time
A mistake sometimes made by enterprise salespeople is assuming that because the average sales cycle is long, all sales cycles are long. With this comes the notion that there’s no rush. Calling tomorrow versus today, or next week versus this, doesn’t matter. Suddenly, a long sales cycle becomes a never-ending one.
This is not selling but only the appearance of it. Going through the ritual, but not delivering results: motion without action. It’s what we do when we spend more time managing leads than acting on them. We go through the steps of selling not with the intent of closing but with the objective of avoiding failure. The state of the prospect varies, from warm to hot and hot to warm, but it never closes.
It’s normal to be bothered by failure, but when you’re in sales, it’s your job to fail, provided it’s not deliberate or for lack of trying. Like a skier studying a steep slope, there comes a moment when we must turn our skis downhill and take on the mountain.
Complex sales are typically long and unpredictable. But sometimes that unpredictability works to our favor and brings luck, the kind that comes from persistence and having a positive but realistic outlook. For this reason, we need always, and relentlessly, to be getting things done. Not frantically, but at a steady pace, the kind that enables us to enjoy work, build confidence, and make quota.
The better our timing and sales execution, the higher our close rate. The longer the sales cycle, the lower our close rate. Whatever we can do to shorten the cycle, the better off we’ll be. However, before we can do that, we need to have a sales cycle, i.e., a process for tracking lead and prospect activity from the first contact to close.
When I joined Scala Business Solutions in 1995, Enterprise Resource Planning (ERP) systems were booming throughout the central and eastern European regions. Communism was out, and capitalism was in. It was the wild west of the east. At times we had more leads than we could manage. Inexperienced sales teams excited to give another demo, but reluctant to qualify the prospect, added to the confusion. Some weren’t sure who they had met and were unwilling to ask for business cards, despite having handed out their own. And nobody made an agenda.
That all changed very quickly. No agenda, no meeting became rule #1 for the sales team. This focused salespeople on planning for meetings and demos. It wasn’t that our sales teams didn’t care previously, it’s just that they had never been taught how to sell. Educated in the communist world, many saw sales as a sort of black box filled with tricks for getting people to act against their will.
Now, salespeople had to plan their meetings, not just book them. In the process of creating the agenda, they were having their first dialogue with the prospect. Far from perfect, we had a process that allowed us to measure, and it all revolved around the simple notion of creating an agenda. It was remarkably simple. Everyone got it and put it into practice. In reviewing our forecast, we could now talk about where prospects were in the sales funnel and discuss strategies for converting them to customers. As is often the case, our bottleneck was with closing.
Many opportunities were bogged down in technical details and rolled over in our forecast from one month to the next. The agenda helped to advance the sale, but closing required other tactics. Making the transition from keenly-interested-prospect to buyer is not always easy. Thanks to our consulting team, and its head Clement Cohen, a brilliant strategy was proposed: The Proof-of-Concept (PoC).
In our agenda, we replaced the last bullet “Next Steps” with “Proof-of-Concept.” For about 10% of the estimated project cost, the client could go forward with a test of our system. Should they decide to go ahead with the full implementation, the payment for the PoC would be applied to the project so that the PoC cost would effectively be zero.
A remarkable number of prospects selected the PoC, and those who didn’t were often not the right ones. Not only did this tactic shorten the sales cycle, but it gave us focus. Salespeople now spent the majority of their time managing the top third of their sales funnel rather than attempting to give equal time to all opportunities. In some markets, upwards of 90% of clients who initiated a PoC closed. Further, as consulting resources grew scarce, we used this “scarcity” as a lever for closing business sooner.
We had turned the tyranny of time on its head. Time was now our friend. It was a beautiful thing.
In two years, Scala ECE went from under $4 million in revenues to over $16 million.